Procurement - contracting for public service delivery Last updated April 2007 Procurement is when the public sector buys or contracts goods and services from the private or voluntary sectors. For the voluntary sector, this generally means the delivery of services under contract to local authorities, primary care trusts or other public bodies. The Bureau does not give detailed advice about procurement; however, this guidance and some of the organisations listed below might help you get started. Introduction The public sector refers to a variety of bodies and agencies, including: • The Executive and other Government agencies including non-departmental public bodies • The National Health Service, including local health authorities and Primary Care Trusts • Local Authorities • UK Government departments such as the Inland Revenue, the Department of Works and Pensions • Key public services such as the police, fire service, Judiciary • Further and Higher Education establishments. Procurement has been promoted by government and by some in the voluntary sector as one of the ways that voluntary and community organisations can generate income and become more sustainable and less reliant on grant funding. Government grants and contracts accounts for an increasing proportion of income for the voluntary sector, as public bodies are encouraged to purchase more and more from the voluntary and private sectors. One argument in favour of procurement is that the voluntary sector provides added value when it delivers public services as the organisations are more connected to the service recipients. Critics note that procurement is a form of privatisation and that voluntary sector organisations delivering public services may lose their independence. The reality is that, whatever your political views on procurement, it may be an option for some voluntary organisations to consider, but is not for everyone. If you are not already delivering a service that the public sector buys or would want to buy, then procurement is probably not for you. Deciding whether procurement is right for you: There are a lot of questions to consider when deciding whether to get involved in providing services to the public sector. You and your organisation should spend some time considering the issues before applying or tendering. • Your organisation’s aims? What activities has your organisation been set up to do and what aims does it need to meet? This is both the formal information contained in your constitution and the informal understanding of the values and culture of your organisation. You should consider whether contracting for public sector business fits with your overall aims as an organisation, and whether there are any conflicts that would arise. How would taking on this contract contribute to your objectives? Are you chasing the money rather than chasing your aims? • Your organisation’s activities Are you already delivering a service that the public sector needs or wants to buy? And can you supply that service at a higher quality or more efficiently than competitors? Remember that if you tender to deliver a service, you will need to demonstrate how your skills, activities and experience make you the best organisation for the job. • Your capacity Do you have the necessary systems, staff and management in place to allow you to go through the tendering process and to deliver the contracts? • The impact What impact will a change to public procurement contracts make to your organisation? Will there be a significant difference between staff working on contracts and staff working on grant- funded work? Will there be an impact on your service users? Will this change your organisational culture? • Financial and legal considerations Consider the length of the contract, the costs that will be covered and whether you will continue to raise money and deliver services other than those under the contract. Are you moving from grant-dependency to contract- dependency? Does entering into a contract agreement make you liable for VAT or other taxes? You should also consider whether carrying out the contract would constitute trading and if this does not fall within your primary purpose, do you need to set up a trading subsidiary, such as a social enterprise? The Charity Commission produce guidance to help answer these questions. Finding procurement opportunities: First if all, how do you find out about procurement opportunities? A good start would be to find and maintain good contacts at the public sector bodies doing work that you are involved in. For example, if your organisation provides health-related activities, you should ensure you have contacts at your local Primary Care Trust. Many statutory authorities employ contracting/ procurement officers. You may already have a direct relationship with public bodies, for example, clients of health services or social services might get referred on to your organisation. Or the link might be less direct; the work you do might have a knock-on effect on public services, e.g. preventative health work. To contract with the public sector, you will have to make a strong case for the work you do and why the public sector should pay for it, so the more thought you’ve given to how your work complements and supports public service delivery, the better. Most of the references below are places you can find out about specific goods or services that are being put out to tender. However, for many local groups delivering specific services and activities, a better approach would be to get in touch with the relevant officer or member of staff at whichever public body does or could benefit from the services you provide. You should make sure they are aware of you and your work, so that if there are likely to be opportunities for procurement of public services in your area of work, you will get to hear about them. Sources of tender opportunities The Supplier and Contract Management System carries tender information from all local authorities in Yorkshire. Suppliers can register with the site, upload their details, and search for relevant tenders. Tender details can also be downloaded, and tenders submitted electronically. Organisations interested in public sector procurement can see what contracts are currently available and which contracts have been awarded. Web: http://scms.alito.co.uk Each individual local authority also has some information on procurement online: • Barnsley MBC Web: http://www.barnsley.gov.uk/ bguk/Economic_Finance/ Property_Procurement/ Contract_and_Procurement • Rotherham MBC Web: http://www.rotherham.gov.uk/ graphics/YourCouncil/Procurement • Sheffield City Council Web: http://www.sheffield.gov.uk/ business-economy/contracts Other bodies like Primary Care Trusts, Colleges and Universities may well also have some information on procurement on their websites. You could find the relevant website and do a keyword search for ‘procurement’. In general, finding out about opportunities and being invited to tender needs a combination of research about likely agencies and bodies and networking to build relationships with relevant organisations including staff at public bodies. There are various other places that contract opportunities are advertised; be aware that some of these are likely to be more relevant for organisations working regionally or nationally. • Newspapers and trade journals • The Official Journal of the European Union (OJEU) publishes almost all public procurement contracts over a specified EU threshold in the Supplement to the Official Journal (OJS), which has an online version called Electronic Tenders Daily (TED). Web: http://www.ted.eur-op.eu.int • The website http:// www.supply2.gov.uk enables organisations to register and receive notification of smaller value procurement contract opportunities (typically below a value of £100,000). • Futurebuilders’ publication ‘Guide to Purchasers’ Plans- or How to Find out Who Might Purchase Your Service’ provides guidance on searching for contracting opportunities. Web: http://www.futurebuilders- england.org.uk • The Department of Health (DH) Procurement and Proposals website provides information about purchasing and tenders within the Department of Health and the NHS, and also provides guidance on submitting tenders. Web: http://www.dh.gov.uk/ ProcurementAndProposals/fs/en • The NHS Purchasing and Supply Agency (PASA) ‘Supplier Relations and Communication Strategy’ and ‘ Selling to the NHS - a guide for suppliers’ are both available online. Web: http://www.pasa.nhs.uk • The Bluelight website has tender information from the emergency services Web: http://www.bluelight.gov.uk • The Government Opportunities website has information on procurement opportunities across government. Web: http://www.govopps.co.uk • ‘Meet the Supplier’ events. Events are sometimes organised by local authorities usually in relation to planned regeneration developments or initiatives. The events aim to bring together purchasers of services with potential suppliers and may be a useful way to find out about potential contract opportunities. The Procurement Process There is no standard approach to procurement so there is no one way to get involved or tackle it. Each public body will have its own procedures for tendering for contracts. Local authorities engaging in procurement have to follow a ‘Best Value’ approach which is a shift from just going for the cheapest option to balancing price and quality to ensure value for money. In principle, it is supposed to ensure that services are high quality and responsive to need, not just the cheapest. The voluntary sector can in theory add value to the delivery of public services through its responsiveness to local need and involvement of local communities. You should recognise, however, that with limited budgets available, the balance may well still be heavily in favour of price. Once you have found a tender opportunity, you should make sure you have all the relevant tender documents. Plus make sure you are familiar with the procurement guidelines of the public body – you can contact the procurement department of the relevant agency for this. Local sources of information and support Business Link South Yorkshire may be able to offer some advice to organisations looking to expand their business activities into contracting with the public sector. Web: http://www.blsy.com Sheffield Community Enterprise Development Unit (SCEDU) have done a lot of work around procurement. They have produced a tender readiness toolkit for organisations that are looking to compete for contracts. Contact: SCEDU Tel: 0114 281 4168 email: sdt@scedu.org.uk Web: http://www.scedu.org.uk SCEDU has been working with the Sub Regional Procurement Task Force to produce a guide for enterprises interested in selling to/contracting with the councils of South Yorkshire. This includes details of each local authority’s procedures, rules they work to and some different types of procurement processes. Also there is a list of key contacts within each department for each council. The guide is available online. Web: http://www.scedu.org.uk Voluntary Action Sheffield has a Procurement Support Project Officer who can support any organisation in the Sheffield area and any infrastructure organisation across the South Yorkshire Sub Region considering getting involved in procurement. Contact: Jo Henderson Tel: 0114 2493360 ext 185 email: j.henderson@vas.org.uk Web: http://www.vas.org.uk Voluntary Action Rotherham Contact: Sandra Greatorex Tel: 01709 829 821 Web: http://www.varotherham.org.uk Voluntary Action Barnsley Contact: Barnsley Community and Voluntary Network Tel: 01226 785 564 email: info@bcvn.org.uk Web: http://www.bcvn.org.uk Publications: The National Council for Voluntary Organisations (NCVO) have produced various publications and guidance, which are all available online. Web: http://www.ncvo-vol.org.uk Before Signing On The Dotted Line – all you need to know about procuring public sector contracts An NCVO guide to the rules, procedures and practices that constitute the public sector procurement process. Web: http://www.ncvo-vol.org.uk/ uploadedFiles/Sustainable_Funding/ Publications/Procurement_Guide.pdf The Charity Commission guide CC 37 - Charities and Contracts sets out the basic considerations to be undertaken when entering into a service delivery contract. Web: http://www.charity- commission.gov.uk In March 2007, the Charity Commission published an all-charity survey of charities delivering public services. Stand and deliver: the future for charities delivering public services presents the results, covering topics such as full-cost recovery and the length of funding agreements. Web: http://www.charity- commission.gov.uk Think Smart - Think Voluntary Sector! is guidance from the Home Office and Office of Government Commerce on procurement of services from the voluntary and community sector. It is aimed at Government Departments and non-Departmental public bodies but may also be useful to voluntary and community organisations. Web: http:// commercial.homeoffice.gov.uk/ documents/thinksmart.pdf The Voluntary Sector Legal Handbook by Sandy Adirondack & James Sinclair Taylor is published by the Directory of Social Change has a great deal of guidance on the law affecting voluntary and community organisations. Tel: 08450 777 707 Web: http://www.dsc.org.uk More for Your Money – NHS, More for Your Money – local authorities are two guides from the Social Enterprise Coalition written for the NHS and local authorities, but the case studies and definition may also be useful to those thinking about contracting with local authorities. They are available online. Web: http://www.socialenterprise.org.uk All our information is produced in a standard sized typeface, but we can produce it in other formats on request If you are suddenly faced with a financial crisis, there are certain things you need to do. South Yorkshire Funding Advice Bureau The Workstation 15 Paternoster Row Sheffield S1 2BX Tel: 0114 249 4343 email: enquiries@syfab.org.uk Website: www.syfab.org.uk Funding Advice Line 0114 276 5460 Registered Charity No: 1061118 Reg. Company No: 3030641 © SYFAB 2007 All rights reserved. Our information is produced for local community and voluntary groups. No permission is needed for limited reproduction if the Bureau is acknowledged. Large scale reproduction or inclusion in publications for sale must have written permission from the Bureau. The South Yorkshire Funding Advice Bureau welcomes your comments and criticism. You can talk to any member of staff, or contact us by post, phone, fax or email - see the front page for details.